Reluctance to free offers: Testing 'Familiarity' as a potential moderator

In most of previous studies on zero-price effect or free offers, including our own, a large share of participants decide not to accept the offer of a free product. This is particularly surprising in case of products that can bring mere benefits to their users in terms of higher profits (e.g., a digital tool that can help solve a task faster and, thus, help the user earn more money). Our previous studies in this project found that people are indeed more reluctant to accept a tool that is presented to them as a free offer than when it is presented to them as a new or alternative version of a task. Therefore, in the second study we investigated whether the reluctance to free offers disappears once participants are prompted to think carefully about their choice, i.e., when participants will make their choice in a deliberative decision-making mode. We found that this is not the case. The main effect of the framing of the offer remains, i.e., even if prompted to deliberate over their choice participants were more likely to reject an offer of a free tool than an offer of a new version of a task. This time, however, we also found that this effect is mediated by the perception of the authenticity of the offer. The mediation is mostly driven by participants behavior and perception in the deliberate treatments. In the current study, we want to test whether the main effect of framing the choice as either "free tool" or "alternative version of the task" is moderated by the familiarity of the offeror. In line with previous research, we hypothesized that free offers will be less surprising and, thus, seem more trustworthy in ongoing relationships, i.e., when people are already familiar with the offeror. Therefore, participants should be less reluctant to accept a free offer if they have already interacted with the experimenter by participating in an unrelated study.